Question 1

Figure 6-6 
-Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

Accepted Answer

A)  no shortage.
B)  a shortage of 10 units.
C)  a shortage of 20 units.
D)  a shortage of 40 units.E) A) and C)
F) B) and D)

Question 2

Whether a tax is levied on sellers or buyers, buyers and sellers usually share the burden of taxes.

Accepted Answer

A) True 
 B)False

Question 3

A binding minimum wage creates unemployment.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not correct?

Accepted Answer

A)  Taxes levied on sellers and taxes levied on buyers are not equivalent.
B)  A tax places a wedge between the price that buyers pay and the price that sellers receive.
C)  The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.
D)  In the new after-tax equilibrium, buyers and sellers share the burden of the tax.E) B) and D)
F) A) and B)

Question 5

If a price floor is not binding, then

Accepted Answer

A)  there will be a surplus in the market.
B)  there will be a shortage in the market.
C)  there will be no effect on the market price or quantity sold.
D)  the market will be less efficient than it would be without the price floor.E) A) and C)
F) B) and D)

Question 6

Table 6-6 
-Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 7

The goal of the minimum wage is to ensure workers a minimally adequate standard of living.

Accepted Answer

A) True 
 B)False

Question 8

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs. Which of the following is not correct? The tax would

Accepted Answer

A)  shift the demand curve downward by 25 cents.
B)  lower the equilibrium price by 25 cents.
C)  reduce the equilibrium quantity.
D)  discourage market activity.E) B) and D)
F) B) and C)

Question 9

Which of the following is correct?

Accepted Answer

A)  Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage raises the average wage of teenagers by 10 percent.
B)  The drop in teenage employment caused by a 10 percent increase in the minimum wage is not significant.
C)  The minimum wage is more often binding for teenagers than for other members of the labor force.
D)  All firms consistently enforce minimum-wage laws.E) A) and C)
F) B) and D)

Question 10

The minimum wage is an example of a

Accepted Answer

A)  price ceiling.
B)  price floor.
C)  wage subsidy.
D)  tax.E) C) and D)
F) B) and D)

Question 11

Figure 6-22 
-Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government?

Accepted Answer

A)  The buyers send the tax payment.
B)  The sellers send the tax payment.
C)  A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers.
D)  The question of who sends the tax payment cannot be determined from the graph.E) A) and B)
F) A) and C)

Question 12

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor, the

Accepted Answer

A)  demand curve for toothpaste shifts to the left.
B)  supply curve for toothpaste shifts to the right.
C)  quantity demanded of toothpaste decreases, and the quantity of toothpaste that firms want to supply increases.
D)  quantity supplied of toothpaste stays the same.E) All of the above
F) A) and B)

Question 13

Figure 6-33 
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

Accepted Answer

The burden...

Question 14

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 15

If a tax is imposed on a market with inelastic demand and elastic supply, then

Accepted Answer

A)  buyers will bear most of the burden of the tax.
B)  sellers will bear most of the burden of the tax.
C)  the burden of the tax will be shared equally between buyers and sellers.
D)  it is impossible to determine how the burden of the tax will be shared.E) All of the above
F) A) and B)

Question 16

A binding minimum wage raises the incomes of some workers, but it lowers the incomes of workers who cannot find jobs.

Accepted Answer

A) True 
 B)False

Question 17

A surplus results when a

Accepted Answer

A)  nonbinding price floor is imposed on a market.
B)  nonbinding price floor is removed from a market.
C)  binding price floor is imposed on a market.
D)  binding price floor is removed from a market.E) B) and C)
F) B) and D)

Question 18

A binding price floor causes quantity supplied to be less than quantity demanded.

Accepted Answer

A) True 
 B)False

Question 19

Scenario 6-2
Suppose demand for a product is given by the equation  and supply for the product is given by the equation 
-Refer to Scenario 6-2. Suppose the government sets a price floor at $13 for this product. Is this price floor binding, and what will be the size of the shortage/surplus in this market?

Accepted Answer

The price floor will not be bi...

Question 20

If a tax is levied on the sellers of a product, then there will be a(n)

Accepted Answer

A)  downward shift of the supply curve.
B)  upward shift of the supply curve.
C)  decrease in quantity supplied.
D)  increase in quantity supplied.E) C) and D)
F) B) and D)

Exam 6: Supply, Demand, and Government Policies

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
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A price floor set at...
View Answer

The minimum wage is an example of a

Correct Answer
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If a tax is levied on the sellers of a product, then there will be a(n)

Correct Answer
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Which of the following is correct?

Correct Answer
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Correct Answer
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The price floor will not be bi...
View Answer

Whether a tax is levied on sellers or buyers, buyers and sellers usually share the burden of taxes.

Correct Answer
verified

The goal of the minimum wage is to ensure workers a minimally adequate standard of living.

Correct Answer
verified

Which of the following is not correct?

Correct Answer
verified

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs. Which of the following is not correct? The tax would

Correct Answer
verified

A surplus results when a

Correct Answer
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A binding price floor causes quantity supplied to be less than quantity demanded.

Correct Answer
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Figure 6-22 -Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government?

Correct Answer
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A binding minimum wage creates unemployment.

Correct Answer
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A binding minimum wage raises the incomes of some workers, but it lowers the incomes of workers who cannot find jobs.

Correct Answer
verified

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

Correct Answer
verified

If a tax is imposed on a market with inelastic demand and elastic supply, then

Correct Answer
verified

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor, the

Correct Answer
verified

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

Correct Answer
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The burden...
View Answer

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

Correct Answer
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If a price floor is not binding, then

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

The minimum wage is an example of a

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of a product, then there will be a(n)

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe price floor will not be bi...View AnswerShow Answer

Whether a tax is levied on sellers or buyers, buyers and sellers usually share the burden of taxes.

Correct AnswerverifiedShow Answer

The goal of the minimum wage is to ensure workers a minimally adequate standard of living.

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs. Which of the following is not correct? The tax would

Correct AnswerverifiedShow Answer

A surplus results when a

Correct AnswerverifiedShow Answer

A binding price floor causes quantity supplied to be less than quantity demanded.

Correct AnswerverifiedShow Answer

Figure 6-22 -Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government?

Correct AnswerverifiedShow Answer

A binding minimum wage creates unemployment.

Correct AnswerverifiedShow Answer

A binding minimum wage raises the incomes of some workers, but it lowers the incomes of workers who cannot find jobs.

Correct AnswerverifiedShow Answer

A tax of $1 on buyers shifts the demand curve downward by exactly $1.

Correct AnswerverifiedShow Answer

If a tax is imposed on a market with inelastic demand and elastic supply, then

Correct AnswerverifiedShow Answer

Suppose the equilibrium price of a tube of toothpaste is $2, and the government imposes a price floor of $3 per tube. As a result of the price floor, the

Correct AnswerverifiedShow Answer

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the sellers in this market?

Correct AnswerverifiedThe burden...View AnswerShow Answer

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

Correct AnswerverifiedShow Answer

If a price floor is not binding, then

Correct AnswerverifiedShow Answer

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A price floor set at...
View Answer

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The price floor will not be bi...
View Answer

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The burden...
View Answer

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